Vodafone Group Plc shares fell after fiscal third quarter results revealed a further softening in its German operations.

Organic service revenue in the country fell by 6.4% in the quarter, the company said in a statement on Tuesday. Vodafone said its earnings from the country are now expected to be lower in the second half of the year than in the first and pointed to a softening in the mobile market.

Shares in the the Newbury, England-based company fell as much as 6.5% in London at 8:10 a.m. to 65.4p each.

“We are continuing to invest in the turnaround of our German business and we are starting to see improving customer trends, although conditions have become more challenging in the mobile market,” Vodafone Chief Executive Officer Margherita Della Valle said in the statement.

Germany, which accounted for about 38% of Vodafone’s revenue in 2024 and has been impacted by a law that barred housing associations from bundling TV packages with rent, has been a persistent weak spot for the company.

Della Valle is struggling to revive the company’s share price despite delivering many of the key parts of her turnaround plan. She sold off underperforming businesses in Italy and Spain, and got UK authorities’ approval to merge local operations with CK Hutchison Holdings Ltd.’s Three to become the largest mobile operator in the country by revenue.

Vodafone’s results beat expectations in other areas of the business. Group organic service revenue increased 5.2% in the quarter, exceeding an average analyst estimate of 4.21%. It also reconfirmed guidance for the year.

“This was driven by a step-up in the UK and strong performance in Turkey and Africa,” Della Valle said.